Just today I spotted a pair of swans with their wings up, doing some sort of dance-like performance… now I know that wings being up is never a positive thing, so what exactly is going on? They were kind of circling, going back and forth, pretty close up to each other.

Your observation was probably two male swans drawing a line in the water for territory. If one swan crosses the line, there will be a fight until the alpa male will strike at the intruder and chase the interloper from his territory. This behavior can be observed throughout the year, but is more prevalent during breeding/nesting/hatching season. The Regal Swan